Dow drops 634 points after S&P downgrade
August 8th, 2011
04:16 PM ET

Dow drops 634 points after S&P downgrade

[Updated at 4:16 p.m.] The Dow Jones Industrial Average has suffered its worst one-day loss since December 2008, plummeting 634.76 points - to 10,809.85 - after S&P downgraded its rating for U.S. credit.

Monday's preliminary figure, after trading ending at 4 p.m. ET, represents a one-day loss of 5.5%. The Dow is below 11,000 for the first time since November.

The S&P 500 fell 6.6% and Nasdaq Composite was down around 6.9%.

[Updated at 2:27 p.m.] Dow extends loss to 600 points as stock sell-off accelerates.

[Updated at 2:03 p.m.] Dow drops 450 points, falling below 11,000 for first time since last November, as sell-off extends.

[Updated at 1:57 p.m.] President Barack Obama said Monday that the downgrade of the U.S. credit rating by Standard & Poor's occurred because "they doubted our political system's ability to act."

[Updated at 10:33 a.m.] Stocks extend losses after Mortgage finance agencies Freddie Mac and Fannie Mae were downgraded by S&P, following downgrade of the United States. Dow falls more than 300 points.

[Updated at 10:09 a.m.] U.S. stocks plunged Monday as Wall Street had its first opportunity to react to Standard & Poor's downgrade of U.S. debt.

The Dow Jones industrial average was down 203 points, or 1.8%; the S&P 500 lost 25 points, or 2%; and the Nasdaq Composite dropped 58 points, or 2.8%.

Monday's selloff was broad, with 28 out of the Dow 30 and 495 members of the S&P 500 trading in the red. The blue chips were dragged lower by a 8% drop in Bank of America shares and a 4% decline in shares of Alcoa.

CNNMoney.com: Track the markets

[Posted at 9:12 a.m.] U.S. stocks were set to tumble at the open Monday, tracking deep declines in global markets, as investors get their first opportunity to react to Standard & Poor's downgrade of U.S. debt.

S&P 500 and Nasdaq futures were all down more than 2% ahead of the opening bell. Dow Jones industrial average futures were less than 2% lower. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Late Friday, S&P downgraded United States' credit rating by one notch to AA , removing it from the Triple A-club for the first time in history.

Economists and investment strategists largely agree that there could be an initial shock, but the downgrade itself should not impact markets too much.

Still, the rating cut is unprecedented, so nobody can be certain.

Fortune: Wall Street to investors: Don't panic

FULL CNNMONEY.COM STORY
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soundoff (206 Responses)
  1. JAS

    Isn't it a wonderful America under Obama? He blames everyone but himself for the declining condition of the American economy. The pessimism in the nation is as bad as it was in Carter's administration. If fact it is worse since we are more involved with the global economy. We're off to a 230 point drop in the Dow this morning to add to the gloom people are feeling now. The incompetent Obama-Carter-Hoover who plays at being our president is out of ideas if he had any. We will continue to suffer until he is ousted in 2012. That day cannot come soon enough for all Americans.

    August 8, 2011 at 9:37 am | Report abuse |
    • Bermille

      Isn't that the republicans for the past thirty years?

      August 8, 2011 at 10:18 am | Report abuse |
    • Uraluni

      Wait. What? Didn't this entire cascade of events begin under W?

      August 8, 2011 at 10:40 am | Report abuse |
    • Kill Yourselves

      You're all stupid. Both parties RUINED this country. Consumers aren't spending, because of job losses. 8 million jobs gone since NAFTA and other trade agreements were enacted (under Clinton). Add to it the jobs sent overseas and viola.. Nobody can afford to buy anything, or pay their mortgage. If you can't think beyond the past 3-8 years then you should not be allowed to vote or breed. This is chess it isn't checkers. Stop voting for the same people who have contributed to the ripping off of America and things might change. Neither party wants you to earn a decent wage.

      August 8, 2011 at 11:06 am | Report abuse |
  2. Gary

    There is no time for a vacation for anyone. But, it appears that congress feels like they have earned time off. They are on vacation while our country is being destroyed financially. Where is the patriotism? It is with those brave men and women who serve this country every day like the 31 brave souls that perished while serving their country in Afghanistan this past week. I ask every Congressman and Senator to come back to Washington and fix this mess once and for all. WE DON'T HAVE A DAY TO WASTE!!!!!!!!!!!!!!!!!!

    Gary
    Retired Army
    Atlanta, GA

    August 8, 2011 at 9:41 am | Report abuse |
    • RUFFNUTT

      i feel your pain gary... i've beeen working for 4 weeks stright cause gas is so high and food cost have gone up...
      .
      there is no way gas and food should be so expensive...

      August 8, 2011 at 10:40 am | Report abuse |
  3. michaelfury

    http://michaelfury.wordpress.com/2010/09/10/ghosts-in-the-machine/

    August 8, 2011 at 9:46 am | Report abuse |
  4. terry vander molen

    theres plenty of blame on obama, but make no mistake, the highjacked gop(teaparty) are not listening....you need to raise taxes on the top 3% plain and simple...the poor and almost gone middle class can't shoulder this.....we bailed out millionaires and bankers with bush...yet obama gets hammered for trying to help main street.....obama care isn't perfect but its a start....make amendments...its not tha tough, everyone in washington needs to listen to bernie sanders.....nafta has to end as well as free trade with china....these free trade agreements have destroyed the middle class way of life...it doesn't affect the top 3%....but the rest of us are.....we need another revolution if free trade thing isn't changed or....we as americans are! no matter how many times hannitty says i'm a great american!....all lip service!

    August 8, 2011 at 10:09 am | Report abuse |
  5. Bermille

    If Forbes agrees that it was a political decision that S&P made the downgrade, then surely it means that it is NOT one party's or individual's fault.

    August 8, 2011 at 10:19 am | Report abuse |
  6. Phantom II

    President Truman got it right when he said, "the buck stops here."
    BTW, Truman was a Democrat.

    August 8, 2011 at 10:23 am | Report abuse |
  7. Phantom II

    With all the trouble made by the spending of this administration, it will be far worse if we elect a Tea Party/GOP government.
    Then there will be riots.
    Riots in London are fairly courteous.

    August 8, 2011 at 10:31 am | Report abuse |
  8. joel weinberg

    The end is near ! Doodoo is raining down from the skies ! The horror. . . . . .the horror . . . .

    August 8, 2011 at 10:42 am | Report abuse |
  9. Uraluni

    I think it's time to just liquidate what assets I have left and move into a cozy little shack in the Antarctic.

    It should be pretty warm down there in a few years anyway.

    August 8, 2011 at 10:44 am | Report abuse |
  10. RUFFNUTT

    just like a clogged toilet the usa's economy circleing the bowl and the plunger is about to come out...

    August 8, 2011 at 10:46 am | Report abuse |
  11. rick fouts

    the tea party is holding mainstream america hostage.how can a small fringe wacko group of people wield so much power?the left needs to wake people up and make them realize that these people are nothing but nut bag revelutionaries trying to destroy anything or anyone who dont believe in thier views.Obama needs to get tough and let mainstream america know we will not let these crazy few ruin it for the rest or us and we all need to make our collective voices heard.We need to end the tax cuts for the rich,make welrare recipients work in thier respective communities if possible,we need to empower our poor and downtrodden,and get religion completely out of government and the political arenas.We also need to end both wars and bring our men and women home.WAKE UP AMERICA,before the right wing zealots take over and destroy our way of life....p.s.-end the war on drugs,legalize and take Fox news off the air,all they do is spew lies.

    August 8, 2011 at 10:47 am | Report abuse |
    • Ohhh

      @rick: Yes let's just open the flood gates by having quick and easy access to meth, heroin and cocaine. Legalization has nothing to do with this article anyways, but since you brought it up.. I believe more crackheads on the street will ruin more families, but that's probably what you want. How about just destroying the plantations with pesticides and therefore eliminating the need for a drug war or rehab? Too easy, cost effective and healthy I guess. We need sick so we can have healers eh? You're a shining beacon of light for all to see. Thank you.

      August 8, 2011 at 11:13 am | Report abuse |
  12. Mmmmm

    Patriotism have gone to the dogs...too bad S&P can't under rate the republicans!

    August 8, 2011 at 10:51 am | Report abuse |
  13. War Syndrome

    This is all happening because of the wars. The military has consumed all of our assets and continues to spend more and more every day. This has no end, Obama said he was going to bring our troops back the minute he was president and he did the opposite. America is today the worst place for investment and the only thing we worry is if gays can get married.

    August 8, 2011 at 11:05 am | Report abuse |
  14. dr jose pedro gomez

    I agree with you Uraluni. I have liquidated my assettes in the form of diarreah.

    August 8, 2011 at 11:07 am | Report abuse |
  15. War Syndrome

    All the billions spent on drug enforcement is just a cover to steal money. These agents make more money than anyone in the US. Apart from their salaries they make lots of money letting drugs pass our borders. its a fantasy to believe they stop drugs from coming in. All of this combined with the so called "special forces" has our country in the bottom floor. All things called "special" cost billions and don't work. Its just a fancy and expensive name.

    August 8, 2011 at 11:19 am | Report abuse |
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